Show how a firm that has issued a floating-rate bond with a coupon equal to the LIBOR

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Show how a firm that has issued a floating-rate bond with a coupon equal to the LIBOR rate can use swaps to convert that bond into synthetic fixed-rate debt. Assume the terms of the swap allow an exchange of LIBOR for a fixed rate of 8%.

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ISE Investments

ISBN: 9781260571158

12th International Edition

Authors: Zvi Bodie, Alex Kane, Alan Marcus

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Question Posted: Mar 13, 2024 05:01 AM

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Show how a firm that has issued a floating-rate bond with a coupon equal to the LIBOR

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ISE Investments

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